I'm just curious how things are done elsewhere. When an agent is given a referral from another agent and charges a referral fee, my broker takes the referral fee from the total commission and then subtracts that fee from the agents split. At times, depending on the amount of the referral fee, this puts my broker making more on the deal than the agent. I know that the referral fee is given on the total amount of the commission for that side, but I believe that that amount should be taken from the entire commission and then the split should occur with the broker and agent. I think that by taking the referral fee out of the agent's side instead of off the top and then doing the broker/agent split is discouraging agents from even taking referrals. Anyone have an opinion on this? How is this done in other brokerages?

The referral fee should come off the top of the total gross commission and not after the split.
Your written agreement and office policy should spell this out.

I agree with pikes. The referral should definitely be taken off the top... I have never heard of it being done the way you describe. Well... until now that is!

Every referral I have ever done has come off the top of the commission and then the broker and agent do their split. I wouldn't be too happy if my broker was doing it your broker's way..

Thanks for the info!

I'm with the rest of the board on this - off the top

Off the top, of course, That other way really doesn't make much sense!